Specific Hearing Officer recommendations to be reviewed by Uniformity Committee for recommendation to and further consideration by, the Executive Committee (page references are to the Hearing Officer Report as published on the MTC website):

1. Should Section 18 contain an explicit provision stating that the party invoking alternative apportionment should have the burden of proof that the statutory conditions for alternative apportionment have been satisfied? Should the burden of proof be the same for either the taxpayer or the tax administrator? Hearing Officer Report (“Report”), p. 27.

2. Should Section 18 prohibit the tax administrator from imposing a penalty on a taxpayer (except in cases where the transactions at issue are the result of tax avoidance such as sham transactions, or lack economic substance, do not reflect arm’s length pricing, violate the step transaction doctrine, or otherwise reflect a tax avoidance strategy), when the tax administrator has successfully invoked alternative apportionment but the taxpayer complied with the general apportionment rules in filing its return? Report, p. 29.

6. Should Section 18 prohibit the tax administrator from retroactively revoking his prior approval of a taxpayer’s alternative apportionment method, unless there has been a material change in, or a material misrepresentation of, the facts provided by the taxpayer upon which the tax administrator reasonably relied? Report, p. 31

7. Should the use of alternative apportionment under Section 18 be limited to isolated, limited or non-recurring situations? Should the state be required to address issues arising from a common fact pattern or common filing position by regulation rather than by invoking Section 18? Report, p. 32.